A lender sued a valuer for negligence. The court held that the valuation was outside the range which could properly have been arrived at by a competent valuer. When the borrower went into default, the lender obtained possession and could only obtain a price significantly less than the valuation. The lender’s expert witness said that the valuer’s approach to the valuation , which involved valuing individual lots so as to yield an aggregate sum, was deficient and not the practice adopted by a competent valuer.
The court held that the valuation was substantially outside the range which could properly have been arrived at by a competent valuer. The court noted that:
A valuation of property may not admit of a precise conclusion. Even valuers who are competent and careful may reach different conclusions as to a particular figure. It follows that a difference in valuation may not necessarily mean (of itself) that the valuers were negligent. Equally however, an overvaluation may afford some evidence of negligence. Similarly, a finding that a valuation falls outside a range may not, of itself, be sufficient to establish negligence. However, where there is evidence that a valuation does fall outside such a range, such evidence eases (at least to some degree) the task of the Court in determining whether or not negligence has been established. In the present case, there is a substantial gap and even if one takes a figure of 15% as representing the outer limit of appropriate bracket or range, the valuation of the property in this case fell substantially outside such a range.
The court found the valuer negligent.
The court also found the valuation misleading and deceptive. The court found that the lender would not have loaned the funds had the valuer not been negligent and gave judgment for the lender.
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